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Down Payment & Leverage
How much to put down, and what leverage does for your returns.
Leverage lets a retirement account control more real estate than cash alone would allow. With up to 70% financing, roughly 30–35% down puts a property to work for your plan while keeping reserves on hand.
What leverage does for a retirement account
Buying all-cash ties your account to a single, smaller asset. Financing spreads the same capital across a larger asset base — so appreciation and rental income compound on a bigger number, all inside your tax-advantaged account. The trade-off is the payment, which is exactly what DSCR keeps in check.
A simple example
$100,000 of IRA cash buys one $100,000 property outright. With 70% leverage, that same $100,000 can help acquire a $300,000+ property while leaving reserves intact. The larger asset base is the point — but only if the rent comfortably covers the payment.
Our baseline
- Up to 70% loan-to-value on qualifying property types.
- Minimum 1.25 DSCR — income should cover the payment with a cushion.
- About six months of PITIA held in reserves.
How much should you put down?
At 70% LTV, plan for roughly 30–35% down plus closing costs and reserves. More down means a lower payment and a stronger DSCR — which can turn a borderline deal into a clean approval. The fastest way to see the relationship is to run the numbers below.
Model your leverage and payment
Run price, rent, and terms through our underwriting math to see your loan, DSCR, cash to close, and a five-year projection.
The Loan Planner is the most complete of our calculators -- it turns a property's price, rent, and operating costs into the numbers that actually decide a non-recourse loan: loan amount, LTV, DSCR, monthly PITIA, cash to close, required reserves, and a five-year equity-and-cash-flow projection.
It uses the same 70% LTV / 1.25 DSCR baseline and current Treasury-indexed pricing our officers use, so the estimates you see are grounded in real guidelines rather than guesswork.
Run your numbers in two minutes. Honest estimates -- then apply.
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How it works
- Enter the purchase price, down-payment %, and estimated monthly rent.
- Add carrying costs -- taxes, insurance, HOA, closing %, and an expense allowance.
- Pick a term (15 to 30 years) and the Treasury index that prices your rate.
- Run the scenario to see your full deal, including a year-by-year projection.
Why it matters
Investment-property lending lives or dies on debt-service coverage and leverage, not on personal income. Modeling the deal before you commit shows whether the rent supports the payment at our 1.25 DSCR minimum and whether your down payment keeps you under 70% LTV.
It also shows how much cash you truly need at closing, including reserves, and the projection helps you see past year one -- how appreciation and rent growth build equity and cash flow over a hold.
How to read your result
DSCR is rent divided by PITIA; at or above 1.25 you are inside guideline, and below it is not a no -- it invites an exception or a larger down payment. LTV is your loan divided by price; staying at or under 70% keeps you in the standard lane.
Cash to close blends your down payment, closing costs, and points; six-month reserves are held separately. The projection assumes the appreciation and rent-growth rates you enter, so adjust them to stress-test. All figures are estimates, not a commitment to lend.
Keep going
Frequently asked questions
What is PITIA?
How is my rate estimated?
What if my DSCR comes out below 1.25?
Why does it ask for reserves?
Are the projections guaranteed?
Estimates only -- not a commitment to lend; subject to full underwriting.
Tools & programs
Common questions
What is the maximum I can borrow?
Up to 70% of the property value (LTV), within our $100,000 to $750,000 standard band.
Does a bigger down payment help me qualify?
Yes. More down lowers the payment and raises DSCR, which can move a borderline deal into clean approval territory.
Do I need reserves on top of the down payment?
Plan for about six months of PITIA in reserves in addition to your down payment and closing costs.
See where you stand in two minutes
Educational information only — not legal, tax, or financial advice. Confirm details with your own CPA, attorney, and a Non Recourse Loan specialist.